The rise of the Internet has been a huge benefit to society, but there have been unexpected frustrations, like the need to juggle an ever growing list of passwords and logins. It seems a small price to pay, but at a time when Internet security is increasingly under threat it’s quickly become a major issue.

A decade ago, the average person had just five passwords, while today the number is probably closer to 25, according to industry data.

So how do you manage all that information? The truth is, most of us don’t. We cut corners by using the same credentials for multiple websites or creating new ones every time they visit less frequented websites. As a result, the Internet has been left vulnerable, and it’s a safe bet the problem will only get worse as companies and governments look to do more online.

Now a Toronto company has come up with a solution, and they’ve already made big waves in Canada as well as the United States. Launched in 2008, SecureKey Technologies Inc. aims to become a leader in the emerging field of identity authentication, or more simply, ensuring that people on the Internet are who they say they are. It sounds simple enough but in this day and age of cyber breaches, identity theft and sundry other electronic crimes, authentication has become one of the most important pieces of the emerging mobile commerce puzzle.

SecureKey, which is private, provides services for about 85 government departments and agencies, and has also signed up Bank of Montreal, Bank of Nova Scotia, Toronto-Dominion Bank and CUETS Financial, a leading credit union MasterCard issuer. In the U.S. it’s working with the U.S. Postal Service.

And it’s providing the banks with a unique bonus: the ability to act as a gateway for their customers to other websites they visit including government services such as the Canada Revenue Agency, drivers license issuers, health departments, and so on.

In other words, bank customers only need to remember one password to access scores of websites and services that previously required separate and individual passwords.

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SecureKey doesn’t publish financial results but as a measure of success it has managed to attract a lengthy list of blue chip investors, including Intel Capital, the investment arm of chip-maker Intel Corp., Visa, MasterCard Worldwide, Rogers Venture Partners and Telus Corp.

“Our participation with SecureKey is a natural extension of the services we offer our customers,” says David Heatherly, the head of BMO’s North American retail payments group. “It builds off the investments we have already made in Chip and PIN, and related technologies for simpler, but more secure, online authentication.”

Security “is a global problem about how we conduct remote commerce, commerce where we are not face-to-face with merchant,” says Charlie Walton, chief executive of SecureKey.

“What we are focused on is knowing who you are dealing with, that’s what we are working on,” says Mr. Walton. In industry talk, the word is authentication, matching digital identities with people.

Mr. Walton believes SecureKey’s technology has a potential role to play in most places individuals interact electronically with organizations, be it retailers, financial service providers like banks and insurance companies, governments or healthcare providers.

This space “is one of the most important ones, not just in banking but in any secure transaction environment on the Internet, it could be commerce, business-to-business, government, whatever,” said Lian Zefara, a partner at Capco, an international consulting firm. “I think the industry is significantly behind. Organizations pay massive investment dollars for security but they’re learning the hard way” what happens when they get it wrong.

SecureKey was founded by Greg Wolfond, a successful entrepreneur who rose to prominence in the late 1990s as chief executive and founder of 724 Solutions, a Toronto-based mobile commerce company that briefly achieved a market value of more than $12-billion befalling back to earth in the dotcom crash.

Mr. Wolfond now heads up Blue Sky Capital, a private venture fund which is also backing SecureKey.

The issue of security is especially pertinent now as the banks and wireless companies get set to roll out mobile commerce platforms allowing customers to do transactions on their iPads, BlackBerries and other mobile digital devices. Just as the introduction of e-commerce in the late 1990s sparked a transformation in the way we do business, so mobile commerce will bring about a second wave of change that will be even bigger, experts say.

If security is a problem now, it’s about to become a whole lot bigger as consumers juggle multiple and often complex passwords on their mobile devices. Not surprisingly, players are wary of moving ahead too quickly, fearful of the potential fallout if they get the security part wrong.

As it stands, mobile commerce opportunities in this country are fairly limited, with most of the players — including the banks, wireless companies, tech outfits as well as merchants — still in the trial phase of their technology.

“You need tires on a car, but you need the whole car if you want to go for a drive,” said John Pliniussen, a professor at Queen’s School of Business, adding that the same analogy could be applied to mobile commerce. One of the most important things reqiured before mobile commerce goes anywhere is security, without which consumers will lose faith and there will be no adoption.

Over Christmas the U.S. retail giant Target disclosed that hackers had made off with data on more than 70-million customer credit cards. And in the last six months, Facebook, Google and Twitter have acknowledged that they have fallen victim to data theft.

All the banks are in a race to capture a piece of the emerging mobile commerce space. Retailers, companies of all stripes and even governments have joined the rush.

The promise is enormous, the only question is how the problem of security will be solved.

Mr. Walton is confident SecureKey has a shot at being part of that. It’s not the only company that claims to have a solution, but it’s at the front of the line, he says.

“Our advantage is we brought the novel thinking and action together and we made our investment at the right time,” he says. “In a lot of ventures, success is about getting a whole lot of things right at the right time, and i think we’ve done that.”